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Dover (DOV) Q2 Earnings Beat, Sales Lag Estimates, Up Y/Y

Zacks Equity Research

Dover Corporation DOV reported second-quarter 2019 adjusted earnings per share from continuing operations of $1.56. The figure improved 20% from the prior-year quarter’s $1.30 per share. Earnings also beat the Zacks Consensus Estimate of $1.55.

On a reported basis, Dover delivered earnings per share of $1.35 in the second quarter, up 25% year over year. Earnings included acquisition-related amortization costs of 18 cents and rightsizing costs of 3 cents.

Total revenues in the quarter came in at $1,811 million, marginally up from the year-ago quarter’s $1,798 million, backed by organic growth of 2.9% and acquisition growth of 0.8%. This was partly offset by a 2.5% unfavorable foreign-exchange impact. However, the revenue figure missed the Zacks Consensus Estimate of $1,861 million.

Dover Corporation Price, Consensus and EPS Surprise

Dover Corporation Price, Consensus and EPS Surprise

Dover Corporation price-consensus-eps-surprise-chart | Dover Corporation Quote

Costs and Margins

Cost of sales inched up 0.4% to $1,138 million in the June-end quarter. Gross profit grew 1.12% year over year to $672.6 million.

Selling, general and administrative expenses slipped 7.5% to $396.6 million from $428.7 million reported in the prior-year quarter. Operating profit increased to $276 million from the year-ago quarter’s reported tally of $236 million.

Segmental Performance

The Engineered Systems segment revenues edged down to $696 million from $703 million recorded in the year-ago quarter. The segment’s income increased 4% year over year to $132 million.

The Fluids segment revenues were up 5% year over year to $729 million in the quarter. The segment income jumped 38.7% year over year to $129 million.

The Refrigeration & Food Equipment segment’s revenues declined 4.2% to $385 million from the year-ago quarter’s reported figure of $402 million. The segment’s operating income also dropped 13.7% year over year to $44 million.

Bookings and Backlog

Dover’s bookings at the end of the second quarter were worth $1.82 billion, down from $1.89 billion recorded at the end of second-quarter 2018. Backlog increased 2.2% year over year to $1.41 billion at the end of the quarter.

Financial Position

Dover generated free cash flow of $154.7 million during the April-June quarter compared with $107.5 million recorded in the prior-year quarter. Cash flow from operations came in at $208.7 million in the reported quarter compared with $159.2 million witnessed in the year-ago period.

Outlook
 
On the back of solid backlogs and continued execution of margin expansion, Dover tightened its adjusted earnings per share guidance to $5.75-$5.85 from the prior estimate of $5.65-$5.85 for full-year 2019.

Share Price Performance

Over the past year, Dover’s shares have appreciated 25% compared with the industry’s growth of 12.1%.



 

Zacks Rank and Stocks to Consider

Dover currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Industrial Products sector are Roper Technologies, Inc. ROP, John Bean Technologies Corp. JBT and CECO Environmental Corp. CECE each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here

Roper Technologies has an estimated earnings growth rate of 9.8% for the ongoing year. The company’s shares have gained 33.8% in the past year.

John Bean Technologies has an expected earnings growth rate of 5.9% for the current year. The stock has appreciated 38% in a year’s time.

CECO Environmental has a projected earnings growth rate of 84.8% for 2019. The company’s shares have rallied 43% over the past year.

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